Auto Industry Ad Execs: Quick - Your Cheese is Moving!

2-3-0. I can't seem to get those numbers out of my head.

Forget about recession woes for just a second. Eventually, industry will level off to normalcy with or without TARP, Cash for Clunkers or anything else the government invents. And when it does - the two main selling points auto execs tout in their traditional advertising, MPG and PRICE, will be rendered obsolete.

Why? Well, the next ad promoting an estimated 30 miles to the gallon will seem like peanuts now that the MPG bar has been raised to 230! Give me 200 MPG or it's not worth talking about.

This past Tuesday, a report came out that India's Tata Motors new Nano car passed Euro IV safety tests, which are similar to those required by the US Department of Transportation Safety. With minor modifications - the Tata Nano could start selling in the U.S. by 2011 for as little as $3800.

You have to wonder how an auto brand will be able advertise an $18k car that gets even 50 MPG with a straight face. Where's the market differentiation? In horsepower? Color choices? Maybe it'll be the cool music bed that blares in the background.

Or, perhaps using the same tactics that endeared a Subaru to a core group of outdoor enthusiasts and created an immediate legacy for the Mini Cooper among consumers through VIP treatment at targeted events will be the new method for marketing car brands. If that's the case (which it should be), properties need to be gearing up to make room for test drives and photo ops so event goers can get a glimpse at the emotional appeal "behind the wheel" of something other than a Nano.

Manufacturers Demand More Accountability

Mark Dolliver reported in AdWeek online today that manufacturers are requiring greater emphasis in utilizing on-line advertising. Two-thirds of the respondents are reporting a shift in their online spend to either spending more than in previous years or at least half their budgets for online ads.

Another angle to this story might be that marketers are required to demonstrate greater accountability and ROI in the advertising. Whether its online advertising or sponsorship, over half the respondents are choosing marketing programs that can be measured because of greater pressure to demonstrate results.

So, you might start thinking about how you can demonstrate results for your sponsors.

And if you cannot demonstrate results? Well, 70% of the respondents indicated that if you're unable to measure the marketing initiative - it's slated for reduction or elimination.

Although you may have a great relationship with your sponsors, the CMO is hunting for greater accountability. So, you better be able to demonstrate measurable results. If you don't have benchmarks in place, now might be a good time to talk to your sponsors about how you can integrate metrics so they CAN measure the results.

What results are they looking for now? 44% want to generate new customers, while another 29% want to develop leads, 13% indicated that they want to show they can retain customers and 11% were wanting to increase brand awareness.

So, those signs and banners at your event may not be enough to excite your sponsors. To create sales and sales leads, your sponsor need to be on-the-ground with your event attendees. And while hospitality benefits may help retain some customers, utilizing hospitality to create customers or customer leads is going to be much more important.

As for CMO's looking to build measurable metrics and accountability for sponsorship marketing - you can learn more about Pinpoint SES, an online tool that evaluates potential ROI and measures sponsorship results using company-benchmarks at http://www.pinpointsponsor.com/PINPOINTSESdemo.mov

Measuring Results

It was noted in Jim Andrew’s blog recently that Nielsen research revealed that sponsorship marketing, (forgive me for if I offend for adding the term marketing) is the second most trusted form of advertising.

Yet, just the other day I was talking with the Exec VP of a major retail jeweler that didn’t see the need to invest in MEASURING the value they’re obtaining from their sponsorship.

Measuring our results would be a nice to have, but not a need to have.” Sounds just like that old ad agency axiom from the 60’s that “50% of your advertising works, you just don’t know which 50%.”

The main reason companies don’t measure results from their sponsorship is they have no specific metrics in place to evaluate sponsorship value and nothing in place to capture results. These companies continue to make decisions based on established relationships and intuition (It’s true – look up the peer reviewed study in Journal of Advertising Research – v32, i4 by Farrelly and Quester).

That’s like buying TV time based on your favorite TV show and from your favorite ad rep without caring about HH reach or SKU movement during the schedule.

Many companies are learning to activating relationships and measure the results of their sponsorship marketing (yes, there I go again). Not just by what the sales team heard at the VIP tent, but using tangible metrics that value impressions, potential customer extraction and conversion numbers – even if the conversation occurs 6 months after the event.

Internet advertising, event and sponsorship marketing are 21^st Century tactics that will maximize brand integration into the consumer lexicon. No longer is it possible to justify spending large chunks of advertising budgets on a fragmented broadcast medium that was in its golden era 50 years ago or in a print medium that is dying under the pressure of Internet news sources in a new economy?

But the need to identify and measure metrics is tantamount to understanding and monetizing those results.

Did I mention sponsorship is one of the most trusted forms of advertising?